Business

Weld Wheel Industries is the largest manufacturer of aluminum racing wheels in the world, with revenues in excess of $50 million. Weld manufactures and distributes forged aluminum wheels in racing and specialty vehicle markets.

Client Objective

Several initiatives to grow the business and expand capacity had significantly increased the Company’s leverage. Failures in execution combined with changes in the environment – rising gas prices, diminished SUV sales – reduced revenues and resulted in operating losses and a negative $2.5 million cash flow. White Oak Group was engaged to explore strategic alternatives including a recapitalization or sale of the business.

Results

A targeted marketing effort among more than one hundred strategics and private equity sponsor groups developed substantial competitive interest and resulted in multiple qualified proposals. The Company signed a purchase agreement with a stalking horse buyer and entered into a Chapter 11 proceeding in order to complete the transaction through a Section 363 sale. Five weeks after filing Chapter 11 the Company was sold in a spirited auction to a strategic buyer for a purchase price valued at $25 million – an increase of $9 million over the negotiated purchase price. This additional transaction value greatly enhanced the outcome for stakeholders.

Acquirer

American Racing Equipment, Inc., a Platinum Equity company, will integrate Weld’s operations under the Weld brand and continue to manufacture wheels at Weld’s Kansas City facility. More than three hundred Weld employees and managers joined the successor company.

Business

Metro Financial Services is a thirty year old specialized business and financial services company principally engaged in providing commercial receivables-based financing and related fee-based credit, collection, and management information services, collectively known as factoring. It is one of the largest independently owned factors in the United States.

Client Objective

An external fraud resulted in the need for the company to seek an infusion of outside capital and a refinancing its lending facility. In addition the company required assistance in conducting an objective third party review of its internal underwriting procedures, credit policy procedures and fixed cost structure.

White Oak Group was engaged by the ownership of Metro to achieve this objective.

Results

White Oak Group proposed and implemented an employee reduction program with a concurrent quality improvement in certain key positions and a complete revamping of the credit process. Once completed, it assisted the company in securing a $50mm three-year credit facility and a change of control infusion of $8mm of new capital. Prior ownership remains in the capacity of executive management with an ongoing share of future profitability.

Business

Poter Construction and Develop Company serves the private and public sectors developing and building a wide array of multi-family residential and commercial projects in the Chicago area in the $5 to $30 million project size.

Client Objective

White Oak Group was engaged as the interim manager and restructuring consultant following the untimely death of its sole owner, founder and visionary. There were ten projects in development and construction, all with different lenders and different partners. White Oak’s initial assessment uncovered a material capital shortfall.

Results

The owners death had put the entire company in a holding pattern and created defaults in all its construction loan agreements. With ten residential and mixed use projects in a variety of different stages of construction, White Oak Group developed a plan to downsize overhead, restart the projects, renegotiate various loan agreements and restructure developer equity positions and partnerships. This strategy optimized the outcome for all lending and ownership constituencies and allowed for the continuation of the construction business.

Business

Engineered Specialty Plastics, Inc. is a premier custom plastics injection molder specializing in the precision molding of large items and the processing of complete sub assemblies.

Client Objective

Engineered Specialty Plastics sustained recurring operating losses and faced an impending liquidity crisis. The secured lender focused on business viability and the adequacy of collateral coverage.

White Oak Group provided financial and management services. As Chief Restructuring Officer we negotiated a forbearance agreement with the secured lender, operated the business within negotiated liquidity constraints, explored strategic alternatives and pursued the sale of the Company.

Results

CRO actions included staff reductions, selective price increases, working capital enhancements, and the sale of excess fixed assets. Within the seventeen-week period of the forbearance agreement we completed a change of control transaction that achieved the required recovery for the senior lender.

Business

Premium Plastics, Inc. is a leading US manufacturer of disposable patient care utensils used in hospitals and nursing homes.

Client Objective

Premium Plastics had experienced deteriorating profitability resulting from changes in its competitive environment and increases in its material costs. The advent of hospital purchasing groups put pressure on pricing and reduced contribution to manufacturers.

White Oak Group was engaged by Premium Plastics to advise the owners on issues relating to profitability and to explore strategic alternatives to restructure the business or pursue the sale of the Company

Results

By reducing manufacturing costs and increasing contribution we were able to operate the business with positive cash flow while strategic alternatives were explored. As a result, the Company's senior lender experienced increased collateral coverage and was able to expand the Company's term debt facility.

Cyclical trends in resin costs, structural changes among industry customers (a growing concentration among distributors and the advent of purchasing groups which now controlled the purchasing for more than half the hospitals in the US) shifted competitive advantage to manufacturers with greater scale. Ultimately, White Oak Group structured a transaction which combined Premium Plastics' business with a major industry participant to achieve scale and a broader product mix, and to gain power relative to these purchasing groups.

Transaction value achieved was significantly above prevailing market multiples.

Acquirer

Medegen Medical Products, LLC (sponsored by Nautic Partners LLC )

Business

First Fleet Corporation provides asset management, operational support and financial services for Fortune 1000 Companies that maintain private fleets of trucks, tractors, trailers and material handling equipment. The company currently owns or manages more than 12,000 trucks, tractors and trailers.

Business

$35mm distributor of automotive aftermarket accessories with principal concentration in neon

Client Objective

Failure of a new product line created a liquidity crisis and substantially impacted profitability. Engaged by ownership to turnaround the business and develop strategic alternatives.

Results

Restructured operations and management and implemented an inventory reduction program. Recapitalized the business through a change of control equity infusion and refinancing with the existing lender.

Business

Farm Fresh Catfish is a leading processor of live catfish in the United States

White Oak Group was engaged by the owners of Farm Fresh to assess strategic alternatives.

Business

Mepco Insurance Premium Financing, Inc. is a financial services company that finances the payment of insurance premiums. The Company offers financing to individual and commercial purchasers of property, casualty and liability insurance.

Client Objective

Mepco’s limited equity base constrained the Company's ability to expand its financing volume. Leverage exceeding 9 to 1 debt to equity limited its senior facility to $10 million.
White Oak Group developed a strategic approach to capitalize the business to finance the growth in assets.

Results

White Oak Group arranged $3 million in subordinated debt as well as an expanded $30 million senior debt facility. As a result, Mepco grew its financing volume from $24 million financing volume to more than $100 million.

Business

Homak Manufacturing Company, Inc. was a leading manufacturer of Tool Chests and Roller Cabinets, Home Security Cabinets and Gun Safes, and Medical Carts sold throughout North America into large national retailers, distributors and OEM’s.

Client Objective

Consolidation among national retailers and alternative sources of manufacturing capacity offshore diminished sales and eroded margins. Our charge was to evaluate the strategic alternatives for the business and maximize the outcome for the family owners who personally guaranteed senior debt.

Results

Committed overhead levels mandated an increase in contribution margin on long term contracts and pricing to big box retailers. Failing to re-negotiate pricing, the Company pursued other strategic alternatives. Ultimately, White Oak Group structured a resolution which separately sold real estate and machinery, a product line, and the brand name.
The transaction value achieved ensured a full recovery for the senior secured lenders, allowed for the extinguishment of the personal guarantees and a return of pledged collateral over and above the firm value.

Business

Chicago Extruded Metals Company (CXM) is a leading manufacturer and supplier of brass extruded shapes and rods that services a wide variety of markets and customers throughout North America, with sales of $40 million. Customers include Delphi, Dana Corp., and Eaton.

Client Objective

Following an unsuccessful attempt by management to refocus operations, White Oak Group was engaged at the request of CXM's senior lenders to maximize the value of the business through a restructuring. White Oak Group assumed the role of Chief Restructuring Officer and financial advisor. We operated the business within the constraints of the Company's available liquidity, shared detailed operating information with customers to preserve confidence, and maintained the continuity of shipments without disruption - and so insured the continuation of the going concern.

This was especially a concern to certain strategic customers, notably Delphi Chassis Systems, Dana Corp and Eaton that the Company supplied on a sole-source basis. We worked closely with these groups, and with Delphi's financial advisor BBK, on production and shipment schedules, which we were able to meet throughout the pre-petition and post-petition process. We also coordinated our purchases of inventory and developed tolling arrangements to insure our ability to maintain production during periods of diminished liquidity.

Results

As financial advisors, we prepared confidential information, contacted potential transaction participants within the industry and among financial buyers, received and evaluated indications of interest, and negotiated a sale of the business that was accomplished through a 363 sale subsequent to filing for Chapter 11 protection. As a result of the sale senior lenders received a full recovery and the business continued to operate under new owners. CXM retained its key customers subsequent to the sale.

Business

Wisconsin Tool and Stamping - a sixty-year-old company providing high quality metal stampings to some of the world's leading manufacturing companies.

Client Objective

Following the sale of the company to an ESOP, it experienced deteriorating sales and profitability due to changes in its competitive environment, general economic conditions and its ability to maintain margins. Following an aborted attempt to sell the business and facing continued financial distress, the company filed Chapter 11.

White Oak Group was engaged by Wisconsin Tool to assess the ability to restructure the business under a plan of reorganization.

Results

White Oak Group assisted Wisconsin Tool in successfully operating the business with positive cash flow while strategic alternatives were explored. As a result, the Company's senior lender experienced an intermediate pay down which allowed time to develop alternatives.

Working with Wisconsin Tools' other advisors, White Oak Group generated potential buyers; and, under a Section 363 auction, the company was sold. Scheduled proceeds are sufficient to repay the senior lender, repay the unsecured creditors and allow some distribution to equity interests. In addition, the buyer moved work into the manufacturing facilities which allow for the retention of a majority of the work force.

Acquirer

MSJ Acquisition Corporation, an Illinois Corporation formed by John Dombek Jr and John Dombek III

Business

$50+mil. branded cookie company with manufacturing, branded consumer product, Store-Door-Delivery

Client Objective

Jettisoned manufacturing for co-packing model and placed all SKUs with various co-packers. Focused business around branding and store-door-delivery business. Refreshed packaging and brand.

Results

$6.5 million loss restructured and turned-around to $0.5 million profit. Operation sold for 3.5X original investment in 2 years.

Business

Pate Foods Corporation multi-plant snack food and cookie baked goods manufacturing company

Client Objective

Improve management, increase sales and become a profitable entity

Results

Developed turnaround plan, arranged refinancing of senior secured debt and initiated, advised and completed an add-on product line acquisition to double sales

Business

150-year-old 4th generation family business

Client Objective

Developed turnaround plan with emphasis on operational restructuring and financial focus on cash flow

Results

Entered new/alternative distribution channels. Re-entered the co-packing business

Business

Eagle Finance Corp. (NASDAQ: EFCF), based in Gurnee IL, finances and services sub-prime auto finance receivables, with $250 million revenues.

Client Objective

White Oak Group was engaged as financial advisor to Eagle and its Board of Directors to explore and develop strategic alternatives to maximize shareholder value and creditor recoveries. Developments in the sub-prime auto finance segment reduced sources of financing available to industry participants. Unable to finance and originate new finance receivables, Eagle continued to service its owned and managed receivables assets, and White Oak Group assisted Eagle and its Board in developing and reviewing recapitalization and sale alternatives.

Results

In order to maximize available proceeds White Oak Group initiated discussions with sub-prime auto finance industry participants, other finance companies, financial buyers and investor groups, and developed alternatives involving the sale of assets and transfer of Eagle’s servicing platform. We reviewed with the Board several letter of intent proposals and negotiated purchase agreements from competitive buyers — in order to describe to the Board, and to Eagle’s creditors, terms that maximized creditor recoveries.
Through the ongoing operation of the business and collection of owned and managed receivables, and through the announced sale of its operating assets to Ameristar Financial Company, LLC, Eagle raised proceeds to fully satisfy its senior lenders and partially satisfy its junior creditors. The major portion of Eagle’s employees and management continued in roles with the successor business.

Business

Situated on seven acres in a former grammar school, Horizons provided child care for infants through kindergarten with a capacity of up to 200 children. It conducted its business on a not-for-profit basis.

Client Objective

Publicity surrounding an alleged incident of child abuse caused a 50% drop in enrollment which when combined with a change in student population from private pay to state subsidy created significant liquidity issues.
White Oak was engaged by The Board of Directors to develop a turnaround plan.

Results

White Oak developed and implemented a turnaround plan that included a realignment of programs, staffing and expenses, new marketing programs and a recapitalization and restart of the school through the sale of real estate assets.

Business

Louis Sherry Manufactures and distributes premium sugar-free candies and other specialty food

Results

White Oak Group advised Flavor Brands, Inc. (OTC) in a debt restructuring of its wholly-owned subsidiary

Business

Burke Chocolate Company established 1929, manufactures and distributes chocolate products that are sold primarily to snack food and baked-goods manufacturers. Items include chocolate chips, pralines, pretzels, bar chocolate, chocolate liqueur and cocoa powders.

Results

As the result of pricing pressures on industrial chocolate suppliers, the Company operated with only marginal profitability even as it approached maximum plant capacity. Concentration among integrated manufacturers, pursuant to a debt restructuring , had increase scale advantage for larger competitors. White Oak Group develop a transaction which combined Burke Products’ business with a world-wide integrated manufacturer in order to achieve advantages of scale.

Acquirer

Ghirardelli Chocolate (US division of Lindt & Sprungli)